ANNUAL PROCUREMENT REVIEW

Transcription

1 ANNUAL PROCUREMENT REVIEW 21 Prepared by The Procurement Department May 211 abcd

2 Executive Summary This report, prepared by the Procurement Department (PD), reviews public sector procurement contracts signed in 21, funded by the Bank and procured by the Bank s clients. As in 29, a section is included on the procurement activities of the Nuclear Safety Department (NSD). This report includes the consultancy contracts financed under public sector Bank financing (also included in the report on Engagement of Consultants issued by the Consultancy Unit (CSU)). It does not cover consultancy contracts for the Bank s own needs, those financed through TC, or those awarded by the Office of the General Counsel. In 21, both the total signed contract value and the number of transactions increased significantly in comparison to 29. A total of 113 contracts worth 1,659 million were signed, with s financing totalling 1,28 million (excluding contracts administered by NSD). This compares with 75 contracts valued at 375 million in 29, indicating a substantial increase of 342% in the total contract value for 21. s for the Transport, Municipal and Environmental Infrastructure and Power and Energy projects accounted for 1,656 million, representing 96.5% of all contracts signed by number and 99.8% of all contracts by value during 21. The total value of contracts resulting from open tendering procedures in 21 was 1,196 million, representing 72.1% of the total contract value. It should be noted that contracts amounting to 443 million have been procured using alternative procurement procedures as approved by the Board of Directors under the Bank s Procurement Policies and Rules (PP&R) included under paragraph 2.4. If the contracts procured under alternative procurement procedures are deducted from the total value, the value of contracts resulting from open tendering would represent 98.3%. 21 saw an increase in the level of interest in tendering from countries of operations (21: 63% of all tenders submitted, 29: 57%). In 21, entities from the Bank s countries of operations won 68% of all contracts, in total worth 1,146 million (69% of the total contract value). This represents an increase in terms of number of contracts won and in particular in terms of the total contract value compared to 29 (66.7% and 51.3% respectively). In 21, the six most successful tendering countries in terms of highest contract value were, in descending order: Turkey, the Russian Federation, Georgia, India, Germany and Austria, which together won a total of 1,361 million or 82% of the total contract value. The four most successful tendering countries in terms of number of contracts were: the Russian Federation (21), Bosnia and Herzegovina (14), Germany (11) and Austria (9). In 21, 56 contracts worth 81 million were signed under the six nuclear safety and decommissioning funds managed by the Bank s Nuclear Safety Department. This may be compared with 29, when 61 contracts worth 488 million were signed, indicating a decrease of 8.2% in the number of contracts processed and 83.4% in the total contract value. 2

3 PD handled sixteen procurement complaints and four concerns for Bank financed or administered contracts during the course of 21, as compared to the nine procurement complaints and five concerns in 29. The following can be noted from this report: Firms from a number of countries that are shareholders of the Bank do not appear in the statistics as they have not been awarded contracts. It should in this context be noted that the majority of the contracts financed by the Bank are works and supply & installation contracts which by their nature will require a substantial local participation. Usually this can be achieved by either establishing a formal cooperation with local firms (such as consortium or joint venture) or by registering a foreign firm locally or buying already existing local outfits. Nationality of a consortium will only be registered in the Bank s statistics based on the lead firm s nationality and local firms with foreign ownership will still be registered as local (example Siemens LLP is a Kazak firm registered in Kazakhstan). Another example of how the statistics in this report may be influenced by the above factors is, a Georgian firm tendering as a lead partner in a consortium with a foreign firm won a high value contract in Georgia ( 219 million) which makes Georgia highly successful in the statistics presented in this report. It is also clear from the report that there is an obvious correlation between the level of participation in tenders and the number of contracts won (Example; entities from the Russian Federation submitted 53 tenders and won 21 contracts and firms from the USA submitted only one tender without success). Firms from countries that are not shareholders of the Bank are also participating and are being successful in Bank financed projects. As an example, firms from India won three large value contracts in the Power and Energy sector clearly reflecting Indian firm s strength in this sector. 3

4 Table of Contents 1. Introduction Analysis of Public Sector Procurement Data Volume and Nature of s Analysis by Sector Analysis by Country of Operations Analysis by type of contract Analysis of contract award by country of origin of the tenderers Award Process Level of Participation Public Sector Procurement under Sub-Sovereign Loans Nuclear Safety Department Compliance and Integrity Complaints and Concerns Prohibited Practices Independent Procurement Reviews Annexes: 1) Listing of s by Country of Operations (Value in ) 2) Awards by Country of Origin of the Tenderers (Value in ) 3) Awards by Country of Origin of the Tenderers (Number) 4) Awards by Country of Origin of the Tenderers (Value in by Type) 5) Awards by Country of Origin of the Tenderers (Value in by Procurement ) 6) s Awarded by Country of Origin of the Tenderers 7) Distribution of Tenders Submitted by Country of Operations and by Business Sector 8) Distribution of Tenders Submitted by Country of Origin of the Tenderers and by Country of Operations 9) Distribution of Tenders Submitted by Country of Origin of the Tenderers and by Business Sector 1) Listing of contracts for the Nuclear Safety Department 4

5 1. Introduction Annual Procurement Review 21 This report, prepared by the Procurement Department (PD), reviews public sector procurement contracts signed in 21, funded or administered by the Bank and procured by the Bank s clients. As in 29, a section is included on the procurement activities of the Nuclear Safety Department. This report includes the consultancy contracts financed under public sector loan financing. It does not cover consultancy contracts for the Bank s own needs, those financed through TC funding, or those awarded by the Office of the General Counsel. Information on these other consultancy services contracts is provided in the report on Engagement of Consultants by the issued by the Consultancy Unit (CSU), and information on contracts for goods and services for the Bank s own needs is provided in the Annual Corporate Procurement Review, issued by the Corporate Procurement Unit (CPU). Annexes 1 to 1 of the Annual Procurement Review 21 report contain the statistical data for these public sector procurement contracts during 21. The analysis of the data, as well as the main procurement issues considered in 21 through the activities of PD, can be found in the main body of this report. The report (section 1-3) as well as the annexes will be published on the Bank s website once the report has been reviewed by the Audit Committee. It should be noted that the analysis provided in this report is based on statistics received by extracting data from the Bank s Review and Award database on 28 February 211. s signed in 21 can still be entered into the database after this date but are not included in this analysis for practical reasons. One contract for the supply of goods for the amount of.2 million was signed in 21 but only entered into the database after 28 February

6 2. Analysis of Public Sector Procurement Data 2.1 Volume and Nature of s In 21, the total signed contract value and the number of contracts increased in comparison to 29. In 21, 113 contracts were signed in total. The total value of these contracts came to 1,659 million for which s own financing totalled 1,28 million (see Annex 1 for the listing of contracts by country of operations). In comparison to 29, this represents an increase both in terms of the number of signed contracts (by 51%) and of the total signed contract value (by 342%). Table 2.1.1a illustrates the number of public sector contracts signed between 26 and 21. Table 2.1.1b demonstrates the overall contract value as well as the portion financed by the. Over the past five years, a total of 548 contracts have been signed with a total value of 6,826 million of which the financed 4,749 million. Table Annual Value of Public Sector Awards (26-21) 2.1.1a - Public Sector s Number of s Years 2.1.1b - Public Sector s Values ( million) 2,5 2, 1,5 1, , , Years Portion ( ) Co-Financed Portion 6

7 Co-Financing Of the total contract value of 1,659 million in 21, the financed 1,28 million while the balance of 631 million was provided by other sources, either other financial institutions (IFIs, EU Agencies, commercial banks, bilateral donors) or the borrowers themselves. In comparison to 29, a 371% increase of the total value provided by other sources can be found. In 21, 47 of the 113 contracts (42%) were co-financed in comparison with 33 out of the 75 contracts (44%) in 29. The value of the 47 contracts in which co-financing was present came to 1,146 million and the s portion of these represents 515 million. Table presents the distribution of the 47 co-financed contracts in 21, in EU member countries and non-eu member countries. Co-financed contracts in EU member countries represented 9% of the total number of co-financed contracts and 39% of the total value of all cofinanced contracts. The sector with the highest co-financed contractual activity both in terms of the number of contracts and the highest overall value was the Transport Sector. In this sector 26 cofinanced contracts worth 58 million (44% of the overall co-financed contract value) were signed during 21. In the transport sector all of the co-financed contracts were signed in non-eu member countries. In the Municipal & Environmental Infrastructure (MEI) sector, 19 co-financed contracts were signed, which had an overall value of 279 million. The majority of these cofinanced contracts were signed in non-eu member countries (16 out of 19). In the Power and Energy sector, 2 co-financed contracts were signed, which had an overall value of 359 million. One of these co-financed contracts was signed in a non-eu member countries and the other one in a EU member country. Table Distribution of Co-financed Public Sector s during a Co financed s in 21 (number) Number of s Municipal & Transport Power & Energy Business Sector EU Member Countries Non EU Member Countries 7

8 2.1.2b Co financed s in 21 (Value in ) Values of s in Million Municipal & Env Inf Transport Power & Energy Business Sector EU Member Countries Non EU Member Countries In 21, the average overall contract value was 14.7 million and the average financing was 9.1 million per contract. This represents a substantial increase of 184% compared to the average financing reported in 29, where the financing averaged 3.2 million per contract. In 21, there were 28 contracts in which the total signed contract value was greater than 1 million, 16 of which had a total signed contract value of more than 2 million. In 21, there were 2 contracts in which financing was greater than 1 million, 12 of which had financing of more than 2 million. The largest co-financed contract was the Latvenergo Riga CHP-2 contract in Latvia. This supply and installation contract had a value of 35 million for which provided financing of 15 million (43% of the total contract value). Notably, this contract was not procured in accordance with the Bank s PP&R but following national procedures as approved by the Board. In 21, only two contracts worth 2.5 million (or.15%) were 1% financed by other parties but administered by the. Both of these transactions are included in the total figures of this report. Their awards followed the application of the Bank s Procurement Policies and Rules (PP&R). The first of these contracts was signed under the Kutaisi Water in Georgia and was valued at 1.9 million. This contract was collectively financed by the Swedish International Development Authority, the Millennium Challenge Corporation in Washington DC and the Municipality of Tbilisi City. The second contract was the Khujand Water Supply Improvement in Tajikistan valued at 1.45 million which was financed by a SECO Grant. 8

9 2.2 Analysis by Sector Cumulative data overview Tables a and b illustrate the overall contract value and the number of public sector contracts signed between 26 and 21, by Business Sector. With a total number of 247 contracts worth 2,736 million, the MEI sector had the highest contractual activity both in terms of number and value over the past five years. The MEI sector is followed by the Transport Sector in which there were a total of 18 contracts with a contract value of 2,594 million. Table Annual Number and Value of Public Sector Awards by Business Sector (26-21) 2.2.1a - Public Sector s (number) Number of s Year Power and Energy Telecoms Informatics & Media Country Team Municipal & Environmental Infrastructure Transport 2.2.1b - Public Sector s (Value ) Value of s ( Millions) 1,2 1, , Year Power and Energy Telecoms Informatics & Media Country Team Municipal & Environmental Infrastructure Transport 9

10 21 analysis In 21, the sector with the highest public sector contractual activity in terms of number was MEI, with 41% of the total number of contracts. In terms of contract value the Power and Energy sector was the highest with 42% of the overall contract value. 2.3 Analysis by Country of Operations Cumulative data overview Table illustrates the distribution of contracts signed between 26 and 21 in the countries of operations by contract value. During the past five years the countries with the highest total amount of contract value were, in descending order: the Russian Federation ( 1,865 million), Romania ( 749 million), Poland ( 572 million), Ukraine ( 562 million) and Serbia ( 5 million). The contracts in these five countries add up to 4,248 million which represents 62% of the overall total contract value of the past five years. From 26 to 21, no public sector contracts were financed in Belarus, Estonia, Hungary, Mongolia, Slovak Republic, Slovenia and Turkmenistan. Table Public Sector Awards in the Countries of Operation by value (26-21)* ALBANIA AZERBAIJAN Value of s ( Million) Value of s ( Million) Years Years ARMENIA Value of s ( Million) Years Value of s ( Million) Years BULGARIA CROATIA Value of s ( M illion) Value of s ( Million) Years Years 1

11 FYR MACEDONIA GEORGIA Value of s ( Million) Years Value of s ( Million) Years KAZAKHSTAN KYRGYZ REPUBLIC Value of s ( Million) Years Value of s ( Million) Years LATVIA MOLDOVA Value of s ( Million) Value of s ( Million) Years Years MONTENEGRO POLAND Value of s ( M illion) Value of s ( M illion) Years Years 11

12 ROMANIA FEDERATION Value of s ( Million) Years Value of s ( Million) Years Value of s ( Million) SERBIA Years Value of s ( Million) TAJIKISTAN Years UKRAINE UZBEKISTAN Value of s ( M illion) Value of s ( Million) Years Years * To add clarity, the total contract values have been rounded to millions of Euros. Therefore, contract values below 45, are not shown. These include: FYR Macedonia ( 73,61 in 27), Kazakhstan ( 23,841 in 27), Montenegro ( in 28), the Russian Federation ( in 28), Serbia ( in 28), and Tajikistan ( 24,188 in 27). 12

13 21 analysis Public sector contracting activity in 21 was spread across 18 countries of operations. The five countries with the highest contractual activity in terms of the number of contracts signed were the Russian Federation (19), Bosnia & Herzegovina (19), Romania (12), Georgia (12) and Kazakhstan (11). These 73 contracts represented nearly 64.6% of all contracts signed. The five countries with the highest contractual activity in terms of value, in millions of euros, are Latvia ( 35), Georgia ( 343), the Russian Federation ( 263), Poland ( 93), and Bosnia and Herzegovina ( 85).With a total signed value of 1,134 million, these contracts represent 68% of the total signed contract value in Analysis by type of contract Table gives the distribution of contracts by size and by type. The 55 works contracts represent the largest value by contract type (48% of the overall contract value) whilst the largest proportion in value financed by can be found in the Supply and contract type ( 57 million out of 718). Table Distribution of s by Size and Type (21) Size/Number by Type ( M) Consultant Goods Supply & Works Total ~ ~ ~ > Total Total Value( ) 19,853, ,488,925 88, ,917,7 84,445,19 1,658,794,184 Average Value( ) 1,167,867 5,824,446 88,797 35,895,885 14,626,273 n/a Portion ( ) 16,41,349 55,68,573 73,71 56,63, ,786,152 1,27,6,344 13

14 2.5 Analysis of contract award by country of origin of the tenderers Annex 2 provides a distribution by country of origin of the successful tenderers 1 and the value of contracts signed for the period Tenderers from the Russian Federation have been the most successful over the last five years as they have won a total of 1,88 million or (28%) of the overall contract value combined over the past five years. During the past five years the countries with the highest total amount of contract value were, in descending order: the Russian Federation ( 1,88 million), Turkey ( 757 million), Austria ( 584 million), Croatia ( 532 million) and Germany ( 398 million). The contracts in these five countries add up to 4,151 million which represents 61% of the overall total contract value for the past five years. Annex 3 provides the same breakdown but on the basis of the total number of public sector contracts signed in the period 26 to 21 according to the country of origin of the tenderers. Out of the 548 contracts financed by from (26-21), the highest numbers of contracts were awarded to entities from Bosnia and Herzegovina (64), the Russian Federation (59), Germany (42), Romania (41) and Austria (38). Annex 4 provides the total value of contracts signed in 21, distributed by type and by country of origin of the tenderers. This annex illustrates that in 21 entities from Turkey were overall the most successful in terms of winning Bank administered contracts (26% of total value of contracts). Entities from the Russian Federation were the most successful in winning loan funded consultancy services contracts at (33%) of the overall consultancy services contract value. Entities from Germany have been most successful for goods contract winning (52%) of all goods contracts in terms of value. Entities from Turkey have been the most successful with (49%) in reference to winning supply and installation contracts. Lastly, entities from Georgia were most successful for works contracts with (24.1%) of the value of all works contracts signed during Award Process Table summarises data concerning the public procurement opportunities posted on the Bank s Internet site. It should be noted that the procurement notices were also sent to UNDB for posting in the MDB business opportunity section as well as to the EU for publishing in the Official Journal of the European Union. Table Public Procurement Postings on web site (26-21) Year General Procurement Notices Invitations for Expressions of Interest Invitations to Prequalify Invitations for Tenders Total (*) (*) (*) (*) Since 28 only Invitations for Expression of Interest published by PD are included in this table. In 21, the Bank published a total of 227 procurement notices on its internet site. Out of 88 General Procurement Notices published in 21, 23 were for new projects. It should be noted that Invitations for selection processes administered by the Consultancy Service Unit (CSU) have been published separately by CSU since The successful tenderer is recorded as being only the lead entity in the case of joint ventures. 14

15 Table Distribution of s by Award (21) Size/Number by Award Alternative Competitive Local Tender Open Tender Selection from a Selective Total ( M) Shortlist ~ ~ ~ > Total Total Value( ) 442,782,633 19,462,223 57,135 1,195,65, ,52 112, 1,658,794,183 Average ( ) 11,695,658 1,39, ,45 13,434, ,76 112, n/a Total Portion ( ) 166,476,712 15,649,829 57, ,575, ,52 112, 1,27,6,345 Table illustrates that the majority (89) of the public sector contracts were awarded through open tender. This represents 79% of total number of contracts awarded and 72% of the total contract value. As open tendering only applies to goods, works and supply & installation contracts procured in accordance with the Bank s PP&R (which in 21 was a total of 96 contracts), the public sector contracts awarded through open tendering actually represent 97% of the number of eligible contracts and 99.9% of the total eligible contract value when consultancy services contracts and alternative procurement procedures are excluded. The numbers for 21 indicate that the strong emphasis of the Procurement Policies and Rules (PP&R) on open tendering has been respected when the PP&R applies. Furthermore, the open tender principle was applied and accepted for contracts financed jointly by other sources thus illustrating the Bank s influence on competition in the procurement process. It is important to note that four contracts valued at 443 million were procured using other procurement methods approved by the Board of Directors as an exception to the Bank s PP&R under paragraph 2.4. Annex 5 provides the total value of contracts signed in 21, distributed by method of procurement and by country of origin of the tenderers to whom the contracts were awarded. It reveals that in 21, entities from the Russian Federation were the most successful at winning open tendered contracts (in accordance with the Bank s PP&R) with the total value of 259 million, followed by Georgia ( 226 million), India ( 213 million) and Austria ( 12 million). Overall, entities from these four countries won 61% of all open tendered contracts. Annex 6 provides the details of the public sector contracts awarded in 21, by country of origin of the tenderers. 2.7 Level of Participation Table provides data on the rate of participation in public sector tenders by country of origin of the tenderers for contracts signed in 21. A total of 458 tenders from 44 countries were received during 21, which is a substantial increase in participation (69%) from the 271 tenders received in 29. There was an average of 4.1 tenders per contract, an increase from 29 (14%) reflecting a higher number of invitations for tenders published in 21. The six most successful tendering countries in terms of highest total contract value, regardless of procurement method were, in descending order: Turkey, the Russian Federation, Georgia, India, Germany and Austria, which together won a total of 1,361 million or 82% of the total contract value. 2 Please refer to Procurement Policies Rules addition May 21, for explanation of different tender types. 15

16 The five most successful tendering countries in terms of number of contracts were: the Russian Federation (21), Bosnia & Herzegovina (14), Germany (11), Austria (9) and Georgia (7).Entities from these five countries won a total of 62 contracts worth 735million contributing to 44% of the total contract value. Entities from the five most successful countries in terms of number of contracts won ranked amongst the nine countries having submitted the greatest number of tenders for the year. These five countries submitted 188 tenders, representing 41% of all tenders submitted. Overall 21 demonstrated an increase (51%) in the level of interest from countries of operations. There were 29 (or 63% of total number of tenders submitted) tenders received from countries of operation compared to 192 (or 68.8% of total number of received tenders) in 29. The column Rate of Success seen in Table provides an indication of the ratio between the award of contract and the number of tenders submitted by entities from each country. 16

17 Table Distribution of s by Country of Origin of the Tenderers (21) Tenderer Country Total Signed EUR % of total Value won Number of s won % of Total Number of s Number of Unsuccessful Tenders Total Number of Tenders % Rate of Success % of Total Tenders Submitted ALBANIA 715, AUSTRIA 18,196, BELARUS 12,747, ,613, CHINA 39,742, CROATIA 16,726, CZECH REPUBLIC 11,587, FRANCE 7,87, GEORGIA 226,612, GERMANY 118,854, INDIA 213,465, ISRAEL 3,537, KAZAKHSTAN 5,65, KOREA 7,756, POLAND 32,841, ROMANIA 13,85, FEDERATION 265,689, SERBIA * 238, SLOVENIA 55,583, SWITZERLAND 1,45, TAJIKISTAN 2,318, TURKEY 428,63, UKRAINE 25,12, UNITED KINGDOM 165, Total 1,658,794, % 113 1% n/a 1.% * The Bank permits firms and individuals from all countries to offer goods, works and services for Bank-financed projects regardless of whether the country is a member of the Bank (PPR 2.6). The above list includes only those countries which have participated in the tender processes for contracts financed by the Bank. 17

18 Analysis by Business Sector Annex 7 presents the level of interest generated by the Invitations for Tender by Business Sector. It can be seen that in 21, contracts were spread across 18 countries of operations which generated participation of 458 tenders for 113 contracts or 4.1 tenders per contract. Out of the total aggregate number of tenders submitted 36% was in the MEI sector. s won represents 41% of all contracts in 21, generating 3.6 tenders per contract. Out of the total aggregate number of tenders submitted 48% was in the transport sector. s won represents 39% of all contracts in 21, generating 5. tenders per contract. Out of the total aggregate number of tenders submitted 14% was in the Power and Energy sector. s won represents 17% of all contracts in 21, generating 3.5 tenders per contract Participation of Entities from Countries of Operations Chart A, in the table shows that out of the overall 458 tenders that were submitted during 21, 64% were submitted by tenderers from countries of operations. From Chart B it can be seen that out of the 113 contracts awarded, 57% were won by entities from countries of operations tendering in their own country and 11% were won by entities from countries of operations tendering in other countries of operations. The above figures show an increase in participation of entities from the countries of operation in the tenders for the Bank s funded contracts and increased level of success in tendering outside of their own countries as compared to 29, while the success rate of participation in the tenders in the tenderers own countries remains high, though slightly lower than in the previous year. Table Distribution of Tenders by Country of Operations and non-country of Operation Chart a: All submitted tenders (Number of contracts) Tenderers from Countries of Operation tendering in their own country (44%) Tenderers from Countries of Operations tendering in other Countries of Operations (2%) Tenderers not from Countries of Operations (36%) 36% 44% 2% 18

19 Chart b: All successful tenderers (Number of contracts) Tenderers from Countries of Operation tendering in their own country (57%) Tenderers from Countries of Operations tendering in other Countries of Operations (11%) Tenderers not from Countries of Operations (32%) 32% 11% 57% Entities from s countries of operations won 77 contracts (68% of all contracts) whose total value was 1,146 million (69% of the total contract value). In most cases, entities were most successful in their own countries (winning 64 contracts for a total contract value of 629 million in their own country). There were 13 contracts worth 517 million awarded to entities from s countries of operations in countries different from the country of origin of the tenderer. Entities from 7 countries of operations won contracts in their own countries only. These countries were Albania, Bosnia and Herzegovina, Kazakhstan, Poland, Romania, Ukraine and Tajikistan. They won contracts worth a total amount of 141 million or 8% of the overall contract value. Country and Sectoral Tendering Analysis Annex 8 presents the distribution of tenders submitted by Country of Origin of the Tenderers and by country of operations and Annex 9 presents the distribution of submitted tenders by Country of Origin of the Tenderers and by Business Sector. Out of all tendering countries, entities from Germany diversified their tenders to the greatest extent as they submitted tenders across 12 countries of operations and across the 4 business sectors. German entities won 11 contracts spread across MEI (4), Power and Energy (3) and Transport (3) and Country Team (1). s in Bosnia and Herzegovina, generated the highest level of interest in terms of the number of tenders submitted (54), followed by the Russian Federation (53), and they attracted tenders from entities across 1 and 9 tendering countries respectively. 19

20 2.8 Public Sector Procurement under Sub-Sovereign s In 21, there was a total of 48 contracts that were signed in the context of sub-sovereign public sector projects, showing an increase of 1% compared to 29 (24) and representing 42.5% of the total number of contracts. These contracts have a total value of 1,111 million or 67 % of the overall contract value. In these contracts the portion of financing is 6 % of the total contract amount. 2.9 Nuclear Safety Department The manages six nuclear safety and decommissioning funds which have received over 2 billion in committed contributions. Each Nuclear Safety fund is governed by specific provisions as agreed by the respective Assembly of Contributors to each fund and approved by the Board of Directors. The funds are managed by the Nuclear Safety Department (NSD) at the on behalf of the contributing countries. Procurement under the funds must follow the s Procurement Policies and Rules for public sector projects with the limitation that eligibility is restricted to entities from member countries of the respective funds and the s countries of operations. During 21, 56 contracts amounting to a total value of 81 million were placed under the projects financed by the funds. This represents a decrease compared to 29 (8.2 % in number and approximately 83.4% in value). Annex 1 provides a listing and details of all the contracts financed from Nuclear Safety funds signed during 21. Table provides the distribution of the NSD administered contracts by size and type. 4 out of the 56 contracts signed were below 1 million, the majority of which were for Goods, representing 71.4 % of the total number of contracts and 3.78% of the total contract value. The four contracts with a value over 5 million accounted for 61.68% of the total value of all contracts financed from the funds administered by NSD in 21. The largest contract, worth 28 million, was for a high voltage transmission line in the Slovak Republic signed under the Bohunice International Decommissioning Support Fund (BISDSF). 2

21 Table Nuclear Safety Department-Distribution of s by Size and Type (21) Size/Number by Type ( M) Consultancy Goods Supply and Works Total ~ ~ ~ > Total Total Value( ) 7,319,22 29,489,889 22,429 27,737,747 16,256,729 81,5,996 Average Value( ) 522,8 1,92,218 67,476 27,737,747 1,477,884 N/A Table provides the distribution of the Nuclear Safety Department funded contracts by size and by method of award. s subject to open or competitive selection procedures amounted to 67.9 million which is 84% of the value of total contracts placed. The value of consultancy contracts subject to direct selection in 21 has increased significantly by 14.1% compared to 29. Direct selection of consultants during 21, amounted to a total contract value of 3.9 million (compared to 3.4 million in 29). The largest contract was signed under KIDSF for the Northern Dimension Environmental Partnership, for Client Management Support worth 1.22 million and the second largest contract, worth 1.5 million, was signed under the Chernobyl Nuclear Safety Account (NSA). These two contracts accounted for 58.2% of the overall value of consultancy contracts awarded by direct selection. Table Nuclear Safety Department- Distribution of s by Award (21) Size/Number by Award ( M) Competitive Selection Consultant Direct Selection Consultant Selection from a Shortlist Open Tender Selective Tendering Shopping Direct ing Total ~ ~ ~ > Total Total Value( ) 2,924,549 3,958,56 36,6 65,47,21 3, ,162 8,12,937 81,5,996 Average ( ) 731, ,784 36,6 3,252,361 3, ,978 2,3,234 N/A The projects administered by the Nuclear Safety Department are implemented in strict compliance with the PP&R, however, they are to a great extent affected by the nature of the nuclear industry. Donors to the Nuclear Safety Funds are particularly interested that projects are tendered in a competitive manner. Therefore, NSD informs the Assemblies of Contributors if Direct ing is used and in most cases seeks additionally their prior approval or endorsement. The decisions to use Direct ing are influenced by numerous issues resulting from the established practices of the nuclear industry (such as security, radiation protection and safety requirements) with due consideration to the input coming from related bilateral projects (mainly regulatory assistance). 21

22 3. Compliance and Integrity 3.1 Complaints and Concerns PD handled sixteen procurement complaints and four concerns for Bank financed or administered contracts during the course of 21, as compared to the nine procurement complaints and five concerns in In 21 there were 113 contracts signed in the public sector (29: 75) and 56 contracts signed under Nuclear Safety Funds (29: 61). Table presents a comparison of figures for complaints/concerns reviewed between 26 and 21, by contract type and procurement method. Table Number of Complaints/Concerns by Type Type Procurement Works Open Goods Open Supply and Open Open Consultancy Competitive Total In 21, the majority of complaints/concerns were related to contracts for Works, whereas in 29, the majority of complaints/concerns were related to Supply & contracts. Table on the next page provides a summary of the fourteen complaints and three concerns that were closed in 21. The information provided includes the nature, the business sector and the outcome of the complaint process for each of these complaints and concerns. Nine of these fourteen complaints were not upheld by PCC, two were upheld, one was referred to OCCO and in two cases, although the actual complaints were not upheld, the Bank detected a material violation of the tender procedure and would not finance a contract awarded under that tender. The complaints/concerns raised by unsuccessful entities in 21, varied in nature. The following issues were raised: Challenging the responsiveness of the winning tenderer in respect of meeting the qualification criteria. Challenging the client s determination that a tender has been deemed as non-compliant with the tender documents. Allegations of the Client not responding to requests for clarifications in a timely and/or adequate manner. Contesting the eligibility of a company and any other company participating in a tender who offers equipment in their tender manufactured by the former. Complaining that the Client did not assist the tenderer in clearing its tender from customs. 3 A distinction is made between those issues raised by dissatisfied parties that clients can resolve themselves and complaints that are formally addressed to and require the action of PD. A concern is any issue that is brought to the attention of the by a tenderer regarding the procurement process or contract award. The concern is referred to the contracting authority, which is expected to address and resolve the issue with the relevant party under PD s supervision. If the two parties cannot come to an understanding or an agreement, the concern may be elevated to the status of a complaint. At that point, the freezes the procurement process and an investigation is undertaken. 22

23 Table Complaints and Concerns by Nature and by Business Sector (Complaints Closed During 21) Country of Originator of Complaint/Concern Complaint/ Concern Business Sector Nature of Complaint/Concern ITALY UKRAINE BULGARIA SPAIN Bulgaria: Maritza East 2 TPP Ukraine: Chernobyl Shelter Implementation Plan Bosnia & Herzegovina: Bosnia & Herzegovina Road Rehabilitation Bulgaria: Kozloduy International Decommissioning Support Fund Albania: Tirana Municipal Transport Complaint Concern Power & Energy Nuclear Safety Subsequent to its first two procurement complaints on the tender, the complainant raised further issues, including those of fraudulent misrepresentation regarding reference projects presented by the winning tenderer. The matter was consequently referred to OCCO who undertook a Further Investigation in accordance with the Bank's Enforcement Policies and Procedures. The matter is currently with the Bank's Enforcement Committee to determine any further action. Tenderer, whose tender was not opened due to a court order, demanded to secure the protection of its rights to participate in the tender, based on 's PP&R. Complaint Transport Allegation that the winning tenderer did not have a valid license issued by relevant authorities and that a JV partner of the winning tenderer did not fulfil the minimum requirements as per the tender documents. Complaint Nuclear Safety Complainant contested the eligibility of two competitors to participate in the tender. Complaint MEI Tenderer alleged that the Client did not respond to clarification requests in a timely fashion and that amendments to the tender documents were introduced shortly before the tender submission deadline. NETHERLANDS Albania: Tirana Municipal Transport Concern MEI Tenderer was concerned about the Client allegedly not responding in a timely fashion and that the description of the scope of works of the tender was insufficient. ITALY Albania: Tirana Municipal Transport Complaint MEI Tenderer stated that two of the submitted tenders were abnormally low and that there was an irregularity concerning the reading out of the correct price of one of the tenders at tender opening. 23

24 AUSTRIA SWITZERLAND SLOVENIA CROATIA Bosnia and Herzegovina: Bosnia and Herzegovina Regional Railway Tajikistan: Khujand Water Supply Improvement II Bosnia and Herzegovina: Mahovljani Interchange Bosnia and Herzegovina: Power Distribution Reconstruction Bosnia and Herzegovina: Power Distribution Reconstruction Bosnia & Herzegovina: Bosnia & Herzegovina Road Rehabilitation Bosnia & Herzegovina: Bosnia & Herzegovina Road Rehabilitation Complaint Transport Complainant argues that if a tenderer is prequalified in its own right for the supply of equipment, then other tenderers would not be permitted to offer equipment from this supplier, without the supplier and any other tenderer offering such equipment being disqualified. Complainant further alleged that a tenderer did not meet specific qualification criteria and that the same tenderer was under investigation by the local prosecution office. Concern MEI Tenderer alleged that after the submitted tenders were opened, the competing tenderer was asked by the Client whether they would give a discount, which was allegedly taken into consideration when the prices were announced. Complaint Transport Complainant suggested that the Client did not evaluate the Complainant's or the successful consultants technical proposals correctly, which resulted in an erroneous contract award. The Complainant's letter further includes indirect accusations of the Client having acted fraudulently. Consequently, the issue was referred to OCCO who decided that the alleged fraud case did not merit Further Investigations. Complaint Complaint Power & Energy Power & Energy Tenderer complained that despite having offered the same vehicles under two similar tendering exercises for the supply of vehicles, the tenderer's tender was accepted by the Client under the preceding tendering exercise and rejected under the latest. The tenderer alleged that the tenderer submitting the lowest price tender was not in a position to meet the technical requirements set forth in the tender documents and therefore should have been rejected by the Client for being nonresponsive. Complaint Transport Tenderer complained that the successful tenderer listed equipment for the implementation of the works, which did not meet the requirements set out in the tender documents. Complaint Transport Complainant allegedly was not informed of the outcome of the tender and believed that the fourth price ranked tenderer was unduly awarded the contract, due to the fact that the Client was not satisfied with the asphalt mixing plant proposed by the Complainant for the execution of the works. The Complainant suggests that the postqualification criteria were deliberately too restrictive to limit competition and provide unfair advantage to two particular contractors. 24

25 CHINA Bosnia & Herzegovina: Bosnia & Herzegovina Road Rehabilitation Kazakhstan: Almaty Bus Sector Reform Bosnia & Herzegovina: Bosnia & Herzegovina Road Rehabilitation Complaint Transport The Complainant allegedly was not informed of the outcome of the tender. Complaint Transport Tenderer complained that the Client did not assist in clearing the Complainant's tender from customs, resulting in the tender not being received by the Client prior to the tender submission deadline. The Complainant believes that the handling of the tender by the Client was insufficient and that the tender administration did not allow a fair competition for tenderers from outside Kazakhstan without a local agent. Complaint Transport Complainant suggested that the consortium, which was awarded the contract, was not qualified vis-à-vis the criteria set out in the tender documents. 25

26 3.2 Prohibited practices During 21 the Bank signed the Agreement For Mutual Enforcement of Debarment Decisions. The Agreement was signed by the African Development Bank Group, the Asian Development Bank, the Inter American Development Bank, the World Bank Group and the European Bank for Reconstruction and Development. The list of entities and individuals which are currently ineligible to become an Counterparty can be found on the Banks web site The Procurement Department continues to work in close cooperation with the Office of the Chief Compliance Officer in cases were Prohibited Practices allegedly occurred in the context of procurement or where red flags have been identified in the procurement process. 3.3 Independent Procurement Reviews In 21, PD finalised the following two independent procurement reviews (IPR) that were commissioned at the end of 29. The projects subject to review were: Ukraine: Ukrainian Energy Saving Company (UkrEsco) I and II; and EU/ Municipal Finance Loan Facility PD also initiated the following two new IPRs during 21: Ukraine: Chernobyl Shelter Fund and Nuclear Safety Account Russian Federation: Rosvodokanal The overall objective of all IPRs has been to carry out an independent assessment to ascertain if the procurement, contracting and implementation processes followed by the respective Bank clients for the selected contracts have been consistent with the correspondent loan agreements/legal documents and if the principles of economy, efficiency, transparency and accountability as stated in the PP&R have been satisfied. The projects were selected with reference to PD internal risk dashboard and recommendation of other Bank departments. 26

27 LISTING OF CONTRACTS BY COUNTRY OF OPERATIONS (Value ) 21 Country Name Contrac t ID Op Name Op ID Name Tenderer Name Tenderer Country Sector Actual Signing Type Signed Portion (EUR) Financed % ALBANIA Total ALBANIA 3842 Tirana Municipal Transport Power Transmission Substations Rehabilitation Power Transmission Substations Rehabilitation Reconstruction Euroteorema Peqin Sh.p.k (W) ALBANIA (W) Municipal & 8-Apr-21 Works Open 715, ,559 1.% and widening of Lana Bridge near Kirchberger & Alb-Shpresa ALBANIA Technology Albstar ALBANIA School on Kavaja Edilturci ITALY Road JV Albavia & Kirchberger & Alb- ALBANIA Shpresa JV Energia e Servizi & Edilturci ITALY JV Gjikuria & Albstar ALBANIA JV Sirius & Triss Ndertim ALBANIA Sta-Kris Asphaltobeton GREECE Trema Engineering2 ALBANIA Triss Ndertim ALBANIA ECSEE ALP2 SS- Koncar-Inzenjering za CROATIA (W) Power and 28-Apr-21 Supply & Open 8,75,16 6,92, 79.1% 1 Lot 2 Energetiku I Transport d.d. (KET) (W) Energy ABB ITALY Ansaldo T&D ITALY Areva T&D SWITZERLAND COL GIOVANNI PAOLO S.p.A. ITALY Hyosung KOREA ECSEE ALP2 SS -HYOSUNG Corporation (W) KOREA (W) Power and 31-Mar-21 Supply & Open 7,756,997 7,756,997 1.% 2 Lot 3 ABB ITALY Energy Ansaldo T&D ITALY AREVA T&D SWITZERLAND CYMI SPAIN Dalekovod CROATIA Koncar CROATIA Siemens Consortium ITALY 3 17,222,572 15,392, % ARMENIA 3731 Armenia Lake Sevan Basin Environmental 373 Design and Ludwig Pfeiffer Hoch-und Construction of Tiefbau Gmbh & Co.KG (W) WWTPs in Gavar, Vardenis, Martuni Blesk LLC Farmex Technologies SADE CGTH 28 Sahakyanshin ClSC GERMANY (W) ARMENIA FRANCE FRANCE ARMENIA Municipal & 27-Jan-21 Works Open 3,923,92 3,923,92 1.% ANNEX 1

28 LISTING OF CONTRACTS BY COUNTRY OF OPERATIONS (Value ) 21 Country Name Contrac t ID Op Name Op ID Name Tenderer Name Tenderer Country Sector Actual Signing Type Signed Portion (EUR) Financed % Total ARMENIA 4781 Yerevan Metro Rehabilitation 481 Yerevan Metro Rehabilitation Lot 1: 1 No. New Maintenance Diesel Traction Machine, design, manufacture, factory acceptance, delivery, commissioning and provision of associated i Lot 2: 6 No. New Tenon-Type Bogies for Metro Cars design, manufacture, LLC TsementOptTorg (W) FEDERATION (W) JSC Electro Rolling Stock GEORGIA (W) Repair Plant Tbilisi Branch (W) Municipal & Municipal & 15-Jul-21 Goods Open 47, 47, 1.% 15-Jul-21 Goods 6,48, 6,48, 1.% OOO TEKHMARKET FEDERATION 3 1,873,92 1,873,92 1.% Open BOSNIA AND HERZEGOV INA Bosnia & Herzegovina Road Rehabilitation Bosnia & Herzegovina Road Rehabilitation Lot 1: M14.1 Derventa (Zirovina) - Brod Road & M14.1 Brod-Brusnica Road Corridor Vc Supervision of Works on Mrkonjicputevi (W) CMC INTEGRAL INZENJERING D.O.O JV PRIJEDORPUTEVI A.D. & Gekop Derventa MG-Mind NISKOGRADNJA D.O.O. OSIJEK KOTEKS D.O.O. STRABAG AG Lot 2: M2 Gacko- Prijedorputevi a.d. (W) Brod na Drini & M2 Brod na Drini-Bijeljina put Foca-Ustikolina Road INTEGRAL INZENJERING D.O.O MG - Mind OSIJEK KOTEKS D.O.O. STRABAG AG Institut IGH d.d. (W) (W) SLOVENIA CROATIA AUSTRIA (W) CROATIA AUSTRIA CROATIA (W) Transport 29-Jan-21 Works Open 1,937,829 1,656, % Transport 29-Jan-21 Works Open 1,716,426 1,467, % Transport 14-Jul-21 Works Open 2,32,929 1,983,7 85.5% ANNEX 1